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Gov’t losing millions of shillings in tax evasion on international calls

By Boniface Muoka

The Communication Authority of Kenya (CA) has warned that the government is losing millions of shillings in tax revenue on monthly basis to unscrupulous individuals who have set up illegal termination points for international calls.

The Authority’s Director General Francis Wangusi has also said that illegal operators are denying duly licensed mobile service operators revenue from international call termination charges.

Addressing a press conference at his office, Wangusi said the illegal operators in a month are pocketing about Sh40 million based on figures extracted from a raid the Authority carried out in November 30, last year on an illegal ICT installation at the 680 Hotel.

The Authority yesterday raided a residential house in Lavingtone, Nairobi, and recovered SIM box devices used for termination of international calls.

According to Wangusi, the Landlord of the premise alerted police after his tenants turned violent as he sought to know the nature of business they were engaging in. Police in turn informed the Authority after inspecting the house and finding communication equipment which they suspected were being used for illegal purposes.

The device recovered included four SIMbox equipment, with a combined capacity to hold 144 SIM cards that can simultaneously make calls, and 5,827 SIM cards from local mobile service operators. Out of the SIM cards, 3,017 were from Orange and 2,678 from Airtel. The rest (80) were from Safaricom.

A SIMbox is a device that holds stacks of SIM cards on one side and is connected to the Internet on the other side. Instead of international calls coming in through the traditional gateways, the illegal operators receive the calls through the Internet and then using the SIMboxes, they re-originate them as local calls using SIM Cards from local mobile service operators.

Wangusi said a suspect was arrested during the raid while his accomplices managed to escape. He said the suspect will be charged with operating with an illegal an illegal communication system.

He said mobile service operators will be held accountable if they are found to be colluding with the unscrupulous individuals to engage in illegal business.